Jobs Data Shows Something Big Changed in this Monstrously Overstimulated Economy

Record GDP, record consumer spending, record private investment, but the number of workers accomplishing these feats is down by 4.7 million.

By Wolf Richter for WOLF STREET.

The jobs report’s two components – the survey of 60,000 households and the survey of 697,000 individual worksites – came back together today, after having diverged in September in a way that had caused a lot of premature hand-wringing about the labor market.

Households reported that the number of people working, including the self-employed, rose by 359,000 in October after having jumped by 526,000 in September, and by 509,000 in August, for a total of 1.39 million over those three months, according to the Bureau of Labor Statistics today. This is still down by 4.7 million people from February 2020 (red line).

Employers reported that they added 531,000 employees to their payrolls in October. This includes governments, but they shed jobs for the second month in a row. Over the past three months, including large upward revisions for August and September, payrolls grew by 1.33 million employees. This is still down by 4.2 million people from February 2020 (green line):

Something big has changed.

As jobs have struggled to bounce back, and remain well below pre-pandemic levels, the economy overall, as measured by real GDP, surpassed its pre-pandemic record in Q2 2021. Consumer spending surpassed its pre-pandemic record in Q1 2021. Private investment in buildings, equipment, and the like started setting new records in Q4 last year. Retail spending, which is part of consumer spending but doesn’t include services, has been blowing out every record all year.

But the number of people actually working to accomplish these feats is down by 4.7 million. Let that sink in for a moment.

That’s the weird phenomenon: The economy has been monstrously over-stimulated to get consumers, businesses, and governments to spend record amounts of money, and it is creating lots of spending that counts in GDP, and it’s creating lots of job opportunities. But millions of people, for whatever reasons, have chosen not to rejoin the labor force, triggering widespread shortages of labor, materials, and components.

The labor force phenomenon.

The “labor force” consists of people who are working or who are actively looking for a job in the four weeks prior to the survey of households and are available to work. Many people are still not looking for a job for whatever reason – many decided to retire or are temporarily resting on their stock-market-crypto-housing gains, while others can’t find affordable daycare centers, etc. If they’re not actively looking for a job, they’re not included in the labor force.

So there were 6.0 million people who said they’d like to have job someday but weren’t actively looking for a job or were unavailable to take a job during the four-week period prior to the survey and therefore didn’t count as part of the labor force. There are always a lot of people in this category, but this was still nearly 1 million higher than in February 2020.

The labor force has increased very little over the past 12 months, after initially bouncing back sharply from the collapse in April last year. In October, it barely ticked up and only partially reversed the decline of September, and it remains down by 3.1 million people from December 2019 – among the amazingly askew post-pandemic-boom charts that show that something big has changed in society:

This squished-down labor force, combined with a smaller number of people actively looking for a job (the officially unemployed), caused the headline unemployment rate to drop to 4.6%.

The labor force that is still short by 3.1 million people, the labor shortages that employers are complaining about, and the record spike in unfilled job openings that employers are trying to fill — all tell different aspects of the same story:

Employers have been raising wages to attract people, confident that they can pass on the costs from those wage increases to their customers, which has triggered the largest wage increases across all industries in two decades

…and the worst consumer price inflation since 2008 and 1991:

Employment in federal, state, and local governments fell for the second month in a row, in October by 73,000 workers. At 21.9 million, government employment was down by 909,000 workers from where it had been before the pandemic.

Federal government employment during the pandemic has remained roughly steady outside of the spike during the Census. In October, employment ticked down by 3,000 to 2.88 million.

Employment at state and local governments plunged early on during the pandemic and started to bounce back. But that bounce stalled in August and has reversed some since then.

State governments shed 25,000 jobs in October, most of them in education. After two months of declines, jobs are now down to 5.03 million. Local governments shed 45,000 jobs, almost all of them in education, the second month in a row of declines, now down to 14.01 million:

Employment in manufacturing rose by 60,000 workers – including by 28,000 in the auto industry – to 12.5 million jobs. Payrolls were still down by 270,000 employees, or by 2.1%, from February 2020, as manufacturers are screaming about shortages of materials, components, and labor that prevent them from meeting demand for their products:

Employment in the leisure and hospitality industry jumped by 164,000 jobs in October, as restaurants, bars, hotels, and casinos were offering higher pay and, in many cases, improved schedules in their efforts to attract workers. Some people that used to work in that industry have moved on when the industry shut down. Employment was still down by 1.38 million from the peak in February 2020:

Employment in Construction rose by 44,000, to 7.5 million workers, even as construction companies were struggling with shortages of all kinds of materials that stalled projects and produced a record number of unfinished houses. Employment in the sector was still down by 150,000 from February 2020.

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  306 comments for “Jobs Data Shows Something Big Changed in this Monstrously Overstimulated Economy

  1. J-Pow!!! says:

    Coz I went BBBBRRRRRRRRRR!!!!!

    You’re welcome!

    • BuySome says:

      However remote, it’s always possible the tinfoil topper crowd might have been right. Powell et al may have been hatched from plastic pods and the rest of us are living with Invasion of the Booty $natchers. (Coming to this theater in Technoscope.)

      • Mark says:

        “Powell et al may have been hatched from plastic pods”

        He doesn’t have to be an alien to be a vicious representative of the rich in our society. He just has to be greedy and fearful , like all his country club friends. And be willing to do anything to keep the advantage they have. Winning.

      • robert says:

        The tinfoil hat guys are most often right (double entendre intended), whose denounced and debunked conspiracy theories end up being legislation or presidential decrees after a discreet interval has passed.
        But I don’t think the pod theory was one of theirs.
        BTW, I did watch the original movie lately; good stuff, helps us to understand the current world situation – but that’s what they said when the movie first came in the ’50s. Nothing much changes except the brand of craziness.

        • Nacho Bigly Libre says:

          Most of the conspiracy theories and mass hysteria in the past 5 years have all been all from the left field (double entendre intended).

          It’s the libertarians who have consistently called out the Fed for its hubris and dangerous policies.

        • Nick Kelly says:

          The crowd that gathered on Deeley Plaza for the Second Coming of J. Kennedy Jr were communists.

        • Nacho Bigly Libre says:

          Says the guy who believed and peddled pee pee dossier story for years.

        • NBay says:

          “pee pee” is what woke mommies and grandmas say….real patriots say ‘Piss”, you big military service dodging sissy.

        • Nacho Bigly Libre says:

          Lol, you should have warned Stevie Colbert.

          Poor guy got taken hook line and sinker – wasted so much time and money to jump up and down shouting “pee pee”.

          Miserable conspiracy theorists.

        • NBay says:

          The REAL joke is on you. You think you have rebuffed two “arguments”, when the truth is you are just being toyed with, and are so stuck on defending whatever it is you defend, failed to realize it.

          You aren’t worth serious thought… enjoy jousting at windmills (or word salads) for your “cause”.

        • NBay says:

          You aren’t worth serious thought… enjoy jousting at windmills (or word salads) for your “cause”.

          Is your refrigerator running? I’ll try and catch it when it goes by…

    • Djreef says:


    • Maximus Minimus says:

      You sound like the #realJeromePowell if more coherent.

  2. Cobalt Programmer says:

    In the reddit, antiwork is the fast growing group in the last three months. Lot of young millennial and genZ are venting out the poor conditions of the work, lower salary and lack of healthcare and leave benefits like in Europe. As I was afraid “striketober” did not happen. But in future, it may be strike december or Jan 2022. Most of them are still employed but still complaining. They do not have savings or lot of money to outlast for six months or so. If americans do not have $400 in emergency savings, what do they have to loose? No home, crappy job with no benefits and poor healthcare. if reddit apes can bring the citadel down, reddit apes can also do a general strike.
    Belive me, there is already a lot of strike in small companies. Layoffs for not getting the poke. Thanksgiving travel would be telling. One funny information is, thanksgiving 2021 is costly. Average of <$1 per pound to $1.36 per pound for a turkey. Gas prices anyone? Better learn to walk…

    • For those who are interested in more detailed growth statistics of any reddit groups there’s a subredditstats website that shows antiwork is the #1 fastest growing subreddit for the last month, but for the last week, CryptoCurrency has taken the clear lead, adding nearly twice as many subscribers as antiwork. You can pull up detailed charts for each group, which are quite interesting.

      • Joe Saba says:

        got some squidcrypto available – oh, crap it went to $0.00

        • Anthony A. says:

          Hey, it was a sure thing……..until? Well, there are still 40,000 people holding the Squid coin.

    • Augustus Frost says:

      If it wasn’t for the fake economy accommodated by unprecedented deficit spending and the loosest credit conditions in history, the US economy would not have grown at at all or stagnated since 2008. Then these people would really have something to complain about.

      Comparison to Europe is also ironic, where a much higher number and percentage of this age group don’t even have a job.

      You don’t need to tell me it “sucks” for a lot of people, whether in this age group or otherwise. I get it.

      But believing that the fake prosperity they don’t have access to should be available to the majority of the population is a complete fantasy. Why would anyone believe that a country living beyond its means for decades through “printing” and borrowing should be able to provide the living standards these people think they should have?

      The reason this group collectively and others are dissatisfied is almost certainly because most people are becoming poorer now and they sense they are destined to become even poorer in the future.

      • Joe Saba says:

        not to worry – I will keep raising my rents to sop up some of that EXTRA INCOME THEY ARE GETTING/going to get

        and I’m teaching some that bad behaviour in my properties means YOU CAN GO FIND ANOTHER PLACE TO LIVE

        the feedback is simple – everything is A LOT MORE THAN THEY WERE PAYING- and now I get to rent out THEIR UNIT AT MARKET

        • Jacob Hunt says:

          Is it ‘at market Joe?’
          I have been fascinated that landlords have raised rents so much in the last year. Yeah, we have inflation, but rents started raising hard and fast a year and a half ago before much inflation. Rents are far more than mortgage repayments here in Australia! I’ve wondered openly over the last year why landlords got so carried away with raising rents to ridiculous levels.
          Hey… as long as you call it ‘at market Joe.
          Got to get yours

        • BeaV says:

          @Jacob Hunt

          The “investors” who overpaid for their properties early on in this mess raised rents (many times exorbitantly) to cover their outsized mortgages or to try and make the ROI numbers actually work.

          Given that rental market inventory was artificially suppressed (moratoriums, vacant units held empty due to same), those who absolutely needed to rent paid it, and that raised a bar that existing landlords saw as a green flag to raise their own rents.

          Whether this was justified to cover losses due to moratoriums (restorative), to maximize returns (normal, though in extreme cases perhaps greedy), or to get ahead of the rent control measures they expect will be coming to a market near you as a reaction to what “all the other landlords are doing” (defensive), is probably situational.

        • Dave says:

          You should change your name to Classy Joe Saba

      • Sams says:

        Comparison to Europe is ironic?
        No, it is an apple to oranges comparison. A higher percentage of that age group may be out of work in Europe, but a larger group of them is out of healthcare in the USA. Which bring up questions of the countries providing a living standard for their citizens. I am not convinced European countries have done that by handouts. It may rather be because European legislators are not completely bought of by big money and that old money did have some thoughts about threating their serfs well enough that they do not revolt.

        As for countries living beyond their means, I am not sure European countries on the average is worse than the USA.

        • PETER LORENZONI says:

          Perfectly said. It is almost a Republican doctrine to put down Europe. Always amazed how many European companies compete neck to neck with their American counterparts inspite despite more benefits…

        • VintageVNvet says:

          Want to make sure, from experience, ALL peoples in USA, yes, including WE the Peons, have access to free medical services…
          YES, you will have to wait in line at the local municipalities free medical services facilities,,, but similarly YES, I have done that since my days as an outcast in Bezerkeley because I did not ”like” the ”University Hospital” version, so went down Bancroft to the local ”volunteer” version…
          Time and enough for all folks to real I eyes what is out there NOW in USA,,, IF and ONLY IF you are willing to accept it…
          CERTAINLY NOT speaking of esoteric ”optional” types of surgeries, dental care, etc., etc….
          Just the exact same stuff available for decades from many many free clinics, with volunteer nurses and MD doctors, GOD bless them all,,, and similar types of medical services delivery systems for the last five or now maybe six or seven decades…

      • Jake W says:

        but that’s just the point. they would be much less dissatisfied if they saw everyone’s standard of living dropping. but they’re not satisfied with the older people getting to keep the fake prosperity while they don’t.

        • josap says:

          Our Fake Prosperity allows us, after 40 yrs of working (2people) a paid-off small townhouse. And only because it is paid off can we manage on two small SS checks.

          The bills are paid, we can afford the food we want and go out to lunch maybe once every couple of months. Taking a vacation takes 2 yrs of saving.

      • Scott says:

        As Peter Schiff says, “You Can Print Money But You Can’t Print Stuff”

    • Old School says:

      If you listen to Marc Faber interviews you learn that money printing causes a breakdown in society and the incentives to work. Central banks need a history department.

      • Wisdom Seeker says:


        There’s no point in working for your fair share when the bosses & banksters are just going to print and/or legislate themselves a larger share at your expense, then lie to you that it’s “for your benefit”. The sham scams are wearing thin.

    • theloandoctor says:

      Cargill closed a plant prior to the pandemic which reduced output. There is also a price-fixing lawsuit pending against the largest turkey producers.

  3. Trailer Trash says:

    There was an interesting report on CBS News tonight about people applying for entry-level jobs but can’t get past the algorithms that screen out everybody with some kind of imperfection. For years I have been saying that employers want to pick employees like ordering machinery from a catalog. They have now pushed this approach to the extreme.

    One person talked about applying to 60 employers but only a handful actually bothered to call him back. As usual the bosses are claiming that all workers without jobs are stupid, lazy, and shiftless, and deserve suffering in order to force them into work. As usual the reality is quite different.

    • Joe says:

      Great point.

    • c_heale says:

      A friend of mine had to completely rewrite his resume to get through this screening.

    • Mikey says:

      I’m 62. Computer expert highly qualified. Lots of interview requests but once they figure out age, it ends

      • AlbieOK says:

        Yep. For anyone over 50 now it seems.

        • LW says:

          this has been the case since always – keeping a job at post 50 is one thing but getting a job at post 50 is virtually impossible

          but what I want to know about these weird numbers is where are the unofficial number sets? these are all official numbers – is not the underground/black economy growing in leaps and bounds – the unofficial numbers alone can explain retail numbers (that, and money laundering amped up)

      • drifterprof says:

        Have you tried overseas?

      • Petunia says:

        Try applying to a contract job. Because they only hire short term and pay no benefits, just a daily or hourly wage, they may be more willing to give you a try.

      • Augustus Frost says:

        You can try contract work and offer to lower rate if you want a job badly enough. Back in 2011, I was out of work for four months (at age 46) and looked into it.

        I ended up finding a job (at a slightly higher salary to my prior job) but was in the process of signing on with multiple firms. This was one option I considered. Not sure how it would have worked out but my thinking was some work at lower pay was better than no work at a higher rate.

        • Joe Saba says:

          I quit programming in 2002 – after 8 years contract work
          they dropped rate to $30 an hour
          never looked back and now I work(for myself) at least 15-20 hours per week
          no travel, no extra expenses, etc.
          and I have more work than I can almost handle with 2 workers

          gotta go – got to tend to my tenants(ie collect vig/rent)
          love this passive income also – never would have had time if I was out of town all time

        • BrianC - PDX says:

          @Joe here. $30/hour in 2002? WTF. Base rate for a warm body should have been around $65/hour. If you had domain experience in the areas where we were working, at the time, your rate would have been $95 to $115 for hourly work. Consulting daily rates would be far higher. 5k to 17k per day depending.

          This is mostly Linux embedded, Windows/Linux device drivers. Board bringup. Project recovery work. Some work as contract team lead mentoring teams and new hires…

          As I point out to our US clients, we sell our services world wide, so we won’t be bound to the “customary rate for this geographic location” tripe. We bill based on the value to the customer.

          I tell potential clients that bulk at our rates: If you can find a company that provides better service at a cheaper price, you should hire them.

          FWIW – the last two years there has been no pushback on our rate hikes at all…

        • Joe Saba says:

          I was making $85 an hour pre 9/11
          so yes $30 – keep it

        • NBay says:

          Love how your empire and kicking of peasant ass keeps growing here Saba. It’s my guess in less than two years you’ll likely be forced to say you live 15-20 min from the Sabino ramada, and have to drive south and then east to get there….mostly south.

        • NBay says:

          For what it’s worth, Saba, Dr Weil picked Tucson to start building his empire, too. Think I heard he has something in the Bay Area now.
          So maybe you at least got the location right.

      • Wolf Richter says:


        Ageism has been the rule ever since there were “jobs.” Good friend of mine, at the time in his early 60s, got aged out and was let go before the Pandemic and cannot get a job now. Great tech qualifications, big-tech company resume, etc.

        Ageism trumps everything. 35-year olds don’t want to hire 65-year-olds. Simple as that. I didn’t do it either when I was 35. And now, three decades too late, I feel bad about that.

        But you can try to strike out on your own. That can be the most rewarding gig you ever had if you find your niche and can pull it off.

        • Jacob Hunt says:

          Geez Joe, your second comment was worse than your first. I can’t wait for this real estate pinzi to end!!!

        • BrianC - PDX says:

          Well… I’ve been programming for ~45 years or so. At first, when I started contracting, I was pitching to people that were 10 to 15 years older than I was. Then, over the years, it swapped. :)

          A lot of the people I contract with/for are 15, 20, even sometimes 30 years *younger* than I am. It helps that some of them are people I mentored years ago, or helped with advice when they transitioned out of of engineering and into first level management jobs.

          It helps to:
          – Focus on solving the problem. Get in, do the job and leave.
          – Don’t be *the* problem.
          – Be able to communicate well (written/spoken). Know who you are talking to. The way you communicate with the VP of Engineering is going to be different than the conversation you have with the HW tech bringing up the board you are writing drivers for.)
          – Be good with people (90% percent of tech is handling the people.)
          – Maintain your network. Keep in touch with people!
          – Keep learning stuff. Half life of a SW developer is about 9 months…

        • LW says:

          Spot on. I keep telling my cohort, Why would I want to hire me (now 61) at age 32? Definitely NOT!!!

          But more to the point, why are these 55+ not simply quietly aging out like our parents and grandparents did? Mine had ZERO pensions but aged out ~60.
          What happened to planning and saving for retirement (without greed for third and fourth homes) and then letting it go to the youngsters? Something weird is going on with this 60+ cohort trying to hang on.

          I am super disappointed in my boomer peers being so greedy and self-serving. Let the jobs/careers go … do something useful for ONCE in your life!

        • Apple says:

          Carousel LW? Is that the answer?

        • Wkevinw says:

          I was driscriminated against much more when I was younger than older.

        • polecat says:

          Yeah! .. because those 35-year olds*, they know EVERYTHING … doncha know ..

          Until they Don’t!

          but, but .. OK Boomer’ ..

          *doubleplus bad, if they’re ‘woke’ ..

        • NBay says:

          Very Good question LW.

          A few possibile reasons come to mind. Office work…what can you learn about the real world “around the water cooler”. To me it’s a form of sensory deprivation. Becoming a “professional” also leaves one pretty ignorant of the world, I would think.
          The other one is this almost mandated attempt at a luxury retirement and fulfilling the so called “bucket list” as “goal” posts. I don’t think one learns shit zip lining, going down rapids in a jet boat, or taking cruises and guided tours….Kinda like having a lifelong goal of visiting Disneyland……all rather stupid to me.

          Glad I used my body and brains to earn my living, even if it trashed my back and I now live in a 500 sq ft low income hotel style 3 story 250 unit place for “economic losers”. So FN what?

          Very very grateful I have what I do, and did what I did.

        • NBay says:

          Just one other thought….I have had a ton of different jobs in my life…yeah, “jobs”, never a “career”….(maybe I got that Adult Attention Deficit Disorder…I was thrown out of kindergarten and expelled from HS with 3 mo left…a “perfect record”).
          Which always meant when someone asked me what I did for a living, it would take a while to explain.
          I’m now kinda proud of that, especially in light of the type of our boomer cohort you mentioned….they never got the message of the hippie days, even though it wasn’t very well thought out, to say the least.

        • NBay says:

          Another thought on the hippie scene. We had this goal back then of trying to be what we called “Up Front”…..e.g., totally honest……naked bodies (very nice), naked minds (very difficult)…just like when one was born and before any of this mostly fucked up society/culture (we are all now trying to figure out here, more or less) was installed in your mind and became part of what you now call ‘ME”.

      • Ed C says:

        I can relate. I’m an engineer who worked HW / SW / Systems development for a big Corporation. It was at age 62 that my company succeeded in getting me to lay myself off and call it a retirement; they made my life that miserable. I immediately became a contractor doing the same work for the same company. Win win of sorts. Corporation shucked my medical cost exposure as well as other benefits like vacation pay and retirement contributions. I was free of corporate politics / shaming and was in a position where my new boss, who happened to be a friend, was only worried that I might quit. It was nice to be wanted instead of scorned.

        • Joe Saba says:

          when I was at Lucent they had lots of retiree contractors(former employees) that knew the old fortran based system
          of course virtually none of them knew the new unix/database systems
          I spent lots of time teaching old dogs new tricks

          of course wasn’t 2 years later they imploded because they sold all their hardware via VENDOR FINANCING

          I took my pay in cash and have never looked back

    • Winston says:

      “but can’t get past the algorithms that screen out everybody with some kind of imperfection”

      Like the drug tests which resulted in the loss of 40,000 truck drivers over the last year or the drug tests, background checks for criminal records, obesity, and basic education tests which make 75 percent of our 17- to 24-year-olds ineligible to even serve as cannon fodder level troops in our military?

      • Mora Aurora says:

        During discussion of the distorted fake economy, a friend mentioned he got his teenage son to provide Dad’s liquid test sample. The discussion, soon got surreal on how the son may have faked it, with the conversation ending…hmm, maybe more testing is required!

        • Petunia says:

          When I was working tech, I know of recruiters that too a whiz for their candidates. Met them at the lab with a warm sample.

      • Wisdom Seeker says:

        In today’s military absolutely no one is Cannon Fodder anymore.

        Body bags turn off voters and the MIC needs regular Congressional cash flow.

        And frankly 75% of the youth have no business being on the trigger side of todays weaponry, so better to keep them non-military.

    • Djreef says:

      This is the absolute truth. I’m certain that the algos have filtered me out in the past because of my age.

      • Petunia says:

        Start dropping the older jobs off the resume, ten to twenty years is more than enough. If you have been at the same job forever, cut the time span to less than twenty years.

        Go to the hair dresser and get your hair dyed too if it is too gray. Don’t go too dark and leave a few gray hairs, otherwise it looks unnatural.

    • Augustus Frost says:

      A lot of job postings have fantasy qualifications which few or none actually meet, at least not at the pay being offered.

      In a tighter labor market, that’s not likely to work as well.

    • Mike G says:

      Mindless, butt-covering corporate HR bureaucracy has a lot to answer for.

  4. MonkeyBusiness says:

    Mark Cuban put out a tweet earlier today. He said “4% of people in the USA have quit their jobs because of Crypto gains, and the vast majority made under 50k. ”

    So there you go.

    • CrazyIvan says:

      Don’t you have to cash in the Crypto gains to take time off?

      • Wolf Richter says:

        You borrow against them. Leverage!! Free money!! A miracle!!

        • p coyle says:

          you got me thinking… can i do this with my 401k? 🤣

        • Prince Gbanga says:

          This is even more f*cked up than it sounds:

          You borrow against an appreciated asset instead of selling it because borrowing gives you access to cash without having to realize a capital gain and therefore pay income tax.

          The problem for these people is that if crypto drops and their loan becomes undercollateralized, they will not only get forcibly liquidated but also get a whopping tax bill when their broker auto-reports the involuntary liquidation to the IRS (which they are required to do).

        • GotCollateral says:

          @Prince Gbanga

          Seems like you never heard of overcollateralized DeFi lending protocols or DEX’s or else you would realize how ridiculous

          > broker auto-reports the involuntary liquidation to the IRS

          this sounds.

          Look into: Uniswap, Compound, Aave, Benqi, Curve

          And tell me where in the code base where PII is collected and where these auto reports to any (global) tax authorities are generated?

          DEX volumes have long centralized crypto exchange volumes since for over a year at this point.

          Jurisdiction arbitrage makes it easier than ever to cash out esp compared to the landscape back when I got my feet wet back 2012.

        • Depth Charge says:

          “This is even more f*cked up than it sounds”

          And even more more f*cked up when you consider the “asset.” CRYPTO. This is the reckless way possible to run an economy. Just shameful.

        • Depth Charge says:

          *most reckless

          Sure wish there was a spell check for clumsy proofreaders like myself.

        • Wisdom Seeker says:

          If you borrow $50K in fiat currency against $50K in fundamentally worthless bubble assets, you can simply walk away when the crash claims them both.

          Why not live high for a year and then stick it to the banks when the party ends – what’s not to like?

          When you literally own nothing, but can borrow as much as you like, you’ve got no skin in the game and nothing to lose.

    • Rowen says:

      How does the increased crypto market cap factor into GDP?

      • Augustus Frost says:

        Mostly through the “wealth effect”, though in the backwards mirror of economic statistics, wasting real resources (energy) on crypto “mining” counts as “growth”.

    • billytrip says:

      Crypto “gains” are not “gains” until you cash out. Most of these people never will. And if anyone is dumb enough to loan against these “gains” well more power to them.

    • Apple says:

      What was the name of that crypto ‘stable’ coin Cuban was hawking that went to $0?

      • MonkeyBusiness says:

        Squid Game?

        Remember people, if you can’t be rich, the next best thing would be someone who used to be rich.

  5. DR DOOM says:

    GDP is sinking from a projected 9% that ended up at 6 and now might get to 2. The Fed in Atlanta is saying sub 1 may be coming. Seems to me that the Fed better replace the bearings in the Money Printer with those silky smooth cool running German high speed bearings and Get Er’ Done. Start printing and jacking up that GDP. It’s much more profitable to build a $150k F150 than a plain old work truck for $30k.This is a command and control USSR type of economy that the Kremlin could only dream about. So crank up the money printer and lets go Brrrrrrrrrrrrrrrr and on to a 10% GDP. We are booooooming according to all Gov’t data. Inflation is the small price we have to pay. Cocktail Shrimp and Avacado dip is plentiful in George Town , so why be concerned about inflation? Hit that dip and sauce another shrimp.

    • J-Pow!!! says:

      I have never been more ready to print!!!!!! And I have some new programs to support the economy!!!! An ABC and XYZ a PDQ an RDP a ZZV a BBQ a WTF a GRD!!!!!!

    • Wolf Richter says:

      2.2% annual GDP growth is average for the US over the past 10 years. The US hasn’t seen 3% annual GDP growth since 2005. 6% annual GDP growth is NUTS for the US.

      • Jake W says:

        yeah but the 4% delta is about $900 billion. we borrowed and handed out triple that in december of 2020 and march of 2021. so the roi is pretty poor from that perspective.

        • Augustus Frost says:

          It’s been sinking for years. As an economy becomes more leveraged, the amount of borrowing to create “growth” or even a flatlined economy continually increases.

          You know where that eventually leads and it’s not Oz.

      • Michael says:

        In consideration of inflation doesn’t that really mean that really mean real GDP is negative.

      • Jacob Hunt says:

        So, do these rent increases raise GDP?

      • kam says:

        When you outsource all your value-added economy and fake inflation calculations, then welcome to zero-growth where only borrowing against the hoped-for future incomes of the young keeps the top spinning.

    • Djreef says:

      The problem is bond buying clearly doesn’t work to boost GDP.

      • Jake W says:

        right, the problem is that all bond buying does is transfer wealth from retiree savers to the wealthy. so any amount the wealthy spends is countered by the amount the retiree can’t spend.

        it’s all a zero sum game.

        • RedRaider says:

          I would think the wealthy spend a lesser percentage than the retiree saver. Thus making it a negative sum game.

        • Jake W says:

          redraider, you’re probably right on that. but you have to remember also that the rich don’t spend the gains, they borrow against them, so the wealth effect is often based on leverage. great on the way up, awful on the way down.

        • NBay says:

          Red, you jogged my memory!
          Marginal Propensity to Consume is the concept you speak of.

          I lied, I did take one Econ course but dropped out…I do remember that concept, though.
          Never hear or see it….maybe it was just his, or maybe it’s out of favor, or replaced.

  6. OutWest says:

    When I was young and entering the labor force four decades ago, it was very difficult to find even a miserable job. I would have given anything for this job market.

    I don’t care what anyone says, this is a good time to be starting out. Job hop and work hard. Keep expenses down and try to avoid consumer debt and the rest will take care of itself. To this day, I do work that know one else wants to do…

    • TenGallonHat says:

      and if my aunt had balls, she’d be my uncle

    • drifterprof says:

      Same here, but about 55 years ago. I had a terrible time getting back on a good employment track after drug teen years.

      I would have worked hard and thrived in a job market like this seems to be. Sure lots of shite jobs, but one can do pretty well in the trades, nursing etc.

      Although, some kind of accident or health problem might really take you down these days. Premiums for health insurance appear to hurt net income more than before.

    • Augustus Frost says:

      I started working in 1981, as a bagger in a grocery store while in high school at age 16. Had to have a connection to get the job too, which paid 25c above minimum wage. (Yes, it was union but the most recent contract chopped the starting pay.)

      The primary difference between now and then is expectations.

      Cheap and lax credit has enabled financially and economically marginal segments of the population (which is actually most) to consume and buy things which either didn’t exist back then or their counterparts at the time could not afford.

      Now, I keep reading (including on this site) how these artificially inflated living standards are somehow the birthright of every American.

    • The Real Tony says:

      But companies make you do more work for less money. The 1950’s to the 1970’s was the converse more money for less work and your money went a heck of a lot further than today.

  7. Yancey Ward says:

    Two possibilities- either most of the growth is completely fake, or there were a lot of completely zero/negative productive people in the labor force.

    • Trailer Trash says:

      Many workers are not productive because they are given stupid tasks to do by the bosses. This is a huge problem in computer programming. Projects often become political footballs among the managers until they are quietly put aside, and all the work ends up in the bit bucket.

      The Pentagon has a very long list of failed projects that were obviously stupid ideas. But who is going to tell The General that his idea is junk? Certainly not any underling who wants a promotion.

      Promoting people to their level of incompetence (Peter Principle) has real consequences. One of them is reduced worker productivity. But workers don’t have access to public relations departments and the media. So they take the blame.

      • economicminor says:

        The Dilbert Effect

        • The Real Tony says:

          The Dilbert Effect nothing, it’s companies making workers do a lot more work for the same amount of money thus they hire less workers.

        • Nick Kelly says:

          A Dilbert Cartoon (3 boxes)

          ‘We just replaced our entire IT department: hardware and software.’

          ‘Who advised you?’

          ‘The vendor. They said we were using the wrong kind of electricity.’

      • Beardawg says:


        As in your earlier thread which spawned discussions of ageism, the age of the independent contractor is upon us. Older workers are overqualified and supposedly over-compensated. Younger workers are given stupid tasks and are under-compensated.

        Complaining about employer shortcomings holds no water when you have to build and run your own biz, and the environment for independent contracting is better than it has ever been.

        The biggest problem in venturing out seems to be entitlement and lack of creativity. If you already know your work situation sucks, make your own work situation that does not suck.

        I had about $5K in savings and started a biz in the early 1990’s recession and those in my industry said I was nuts. Made $6K my 1st year, $13K my 2nd year and never made more than $40K, but that was decent $$$ in the mid-1990’s. Worked my own hours – sometimes 12 hours / day, sometimes 2-3 hours / day. No one to blame but myself when my work was tedious.

        • Trailer Trash says:

          For me the age of independent contractor started in 1978. By the mid-80s I was telecommuting via Ma Bell and her very slow modems. It was tough then and probably worse now.

          I know about business – I operated a small farm for ten years, financed by part-time work as a consulting programmer. I quit farming because I got tired of being poor so that other people could have cheap food.

          There aren’t many people still trying to make a living in agriculture. How many more ex-farmers and ex-truckers will it take to result in widespread empty shelves?

          Wall Street parasites and their acolytes love to crap on the people doing the actual work of feeding, sheltering, transporting, and caring for 300 million people. Can’t wait to see them dumpster-diving for economic leftovers like the rest of us.

  8. Has anyone else been annoyed by this meme that’s been repeated so many times lately about how household formation in the US has exceeded the number of housing units built by something like 5 million and that we therefore have a shortage of 5 million homes? What I would like to know is how this meme even makes any sense to anyone. If a new household is formed, they must be moving into a housing unit, so how can household formation exceed the number of new housing units built?

    If you haven’t heard this meme before, there’s a you tube clip that explains it in 45 seconds. Just search for meet kevin the housing crisis for a video published on September 14th, and the relevant part starts at exactly 50 seconds into the video.

    I’ve asked this question in other places, but for some reason, I get completely ignored everywhere else, so I thought I’d try asking the question here.

    I am aware that the original source of the meme is a 24 page report published by the NAR titled Housing is Critical Infrastructure Social and Economic Benefits of Building More Housing, published in June. I’ve read this report and the crux of the argument appears in the middle of page 9. I thought this report would be mocked, but everyone seems to take it seriously. I think even Danielle DiMartino-Booth said that she doesn’t believe it. I know she said she doesn’t believe it, but that concedes that it’s possible. I was expecting her to say it’s preposterous. Or am I the only one who thinks that?

    • p coyle says:

      do they count new households that live in cars? tents?

      • drifterprof says:

        In addition to the churn, there is attrition of householders. More than two and a half million people die each year. In the period 2012 to 2021 that would be about 25 million not needing a household anymore. That would probably open up a few million households.

        • Nik says:

          interesting concept…however how many young people became Consuming and Housing needing Adults in that same time frame..?? lolol aloha

    • drifterprof says:

      The Kevin guy says that between 2012 and 2021, about 12.2 million new households were formed. He defines formation of a new household as: “anytime somebody gets out of a shared living arrangement.” He goes on to say “But we only built 7 million new housing units.”

      1. His definition of a “new household” is ambiguous. He continues with a hypothetical example of someone moving out of their parents house and getting their own apartment. But it could just as well be someone moving out to live with a mate (both defined as new households, but needing only one place). Also, after moving out of a shared arrangement, someone might move back into a shared arrangement in the ensuing years between 2012 and 2021 (get married, or some other shared situation).

      2. He does not consider the base number of vacancies already existing in 2012. Or conversion of older places to multi-dwelling units, etc. Also, units that came on to the market which were not new. For example, individuals or businesses that decided to put a home on the market for rent.

      In short, an individual who moves out of a shared situation does not necessarily need a new unit to be built for them. When I think back about some of the places I lived in, I didn’t think of myself as a “household” needing a “new” unit. For example one of my places was an old single-car 1930s garage converted to be a dilapidated micro-apartment. One nice thing though, was being able to cook a meal, wash the dishes, and put them in the cupboard without getting up from my chair.

      • Those are all interesting points. But my real point was that it’s not just Kevin who repeated this meme, but all kinds of market commentators, and like I said, I don’t know of anyone who mocked the original report by the NAR.

        If the NAR’s excuse is that “technically” they spoke the truth because they never said “net” household formation and didn’t take into account household destruction, all credibility is lost at that point. Of course, they are talking about “net” household formation. Otherwise, the thesis that we have an underbuilding gap falls apart immediately.

        The idea that two households are formed when two people move somewhere to live together is beyond ridiculous.

        Clearly, what market commentators should have done is ignore the NAR report entirely. It was so stupid, it wasn’t worth paying attention to.

        You know what, I can do the entire analysis very simply without delving into complex statistics about household formation/destruction, death rates, homelessness rates (which by the way has decreased in 8 out of the last 11 years and therefore doesn’t support the underbuilding thesis), and historical rates of home construction (which are discussed in detail in the NAR report).

        According to the Census Bureau, average household size has been on a declining trend since World War II and is now 2.5 (while the average home size keeps getting larger). Is it really necessary to consider anything else when pondering the question of an underbuilding gap?

        • Alicia says:

          You need to check out Ivy Zelman, she has been calling out this argument and claiming that certain markets are actually overbuilt:

    • Jacob Hunt says:

      I’ve wondered something similar in Australia.
      Suddenly every town in Australia has a housing crisis, but there are a million less people in Australia since covid hit???
      Are there just alot of empty units in cities that nobody is talking about?

    • Wolf Richter says:

      Orthodox Investor,

      Housing has become a financialized international asset class. Investors are buying houses for investment purposes. If they put them on the rental market, fine. But if they keep them as vacant investments to profit from price increases, etc., it poses a problem. People own multiple homes, and live only in one, and don’t rent out the other – that’s a problem. Overseas investors like to buy US homes as investment without living in them – that’s a problem.

      Once housing is treated like stocks, you can never build enough housing during a bull market.

      The solution is for the Fed to unload its balance sheet, including ALL of its MBS, to allow long-term rates to surge to where they below, and to raise short-term interest rates, and thereby allow home prices to adjust. Once housing turns out to be a money pit for investors, they’ll get out of it, and then suddenly there’s a different housing crisis, called a housing bust. We’ve had this before.

      • cb says:

        @ Wolf –

        Brilliant. Also get the government out of the housing loan business. No subsidized loans, No FHA, HUD, VA, etc. Shutter Fannie Mae, Freddie Mac, etc. All the govt actions just push up housing prices and make new buyers debt slaves.

        Of course corporate builders and landlords, private equity, institutional home buyers and the real estate industry loves government involvement. The group that extols “capitalism” and pretends to favor free markets while racing to the government troughs.

      • Jake W says:

        let’s add to it that non owner occupied housing gets a much higher property tax bill than owner occupied, much the same way commercial is taxed at a higher rate.

      • Swamp Creature says:


        Great post! Agree 1000%

    • Shiloh1 says:

      Berwyn Bungalows (all over the Chicago area) built in 1920s. They’ll last for centuries. Main floor, dormered attic and basements. In the past 100 years many have seen lives as single family, 2 flats and 3 flats. Extended enclosed back porch was three levels, perhaps legally more than a porch. East enough to plumb bathroom and kitchenette. Some related living, some off the books rentals, helping many to weather the Great Depression. Originally many Czech, Polish and Lithuanian owners, now all kinds. Ground zero was close to the old Western Electric Hawthorne Plant, now a distant memory.

    • VintageVNvet says:

      typical nonsense OI,,,
      remembering the first ”social science” required statistics course when i switched from hard science major to Psych at berzerkeley due to laziness, etc…
      really thought is was a joke, and so did the prof who allowed me to take the final without a day in class,,, and, as anyone with a hard science degree and/or background would suspect, made an A in the course, based only on an ace on the final , because the social science statistics course was SO Lame…
      very very clear the vast majority, including the vast majority of folks with college degrees, have NO CLUE

    • Cashboy says:

      I live in the UK and all the factories have been converted into building blocks of condos.
      What I want to know is:
      1) where were all these people coming from that suddenly need housing.
      2) what jobs are all these new residents in these condos actually doing for jobs/income.

  9. Clarke Acton says:

    It’s ERC and PPP money. The treasury has figured out how to increase the money supply without dealing with the Fed. The treasury wants inflation the FED does not. I have not been able to figure out how much the ERC credit is but it’s big. And all the PPP fraud will go on unprosecuted – the money still flowing freely in society. After years of not being able to get money to the people the treasury through PPP and ERC has provided billions of cash, swimming through society, increasing prices and creating consumer inflation. The haves are dwindling the have nots growing larger the money is getting bigger and bigger all the time. Unlike like the Fed expansionary policies which increased monetary capacity but did not increase m0 money supply the treasury giving money directly to the people increases GDP. After 40 years we are at a transitionary time. The next 40 years is inflation. Buckle up it’s going to get weird. The desire to be in a non deflationary asset such as BTC is going to grow and grow

    • ivanislav says:

      A treasury-dot-gov flier says ERC is is an employer credit against payroll taxes, but my reading of it is that the employer can actually keep more money than they pay the IRS on payroll. In fact, for an employee making $30k/year, the employer would pay a couple thousand in payroll taxes, and then receive a much larger $28,000 from the government. This is a totally f’ing crazy and a cash heist if my interpretation is right.

      A direct quote:
      “The tax credit is 70% of the first $10,000 in wages per employee in each quarter of 2021. That means this credit is worth up to $7,000 per quarter
      and up to $28,000 per year, for each employee. If the amount of the tax credit for an employer is more than the amount of the employer’s share of those payroll taxes owed for a given quarter, the excess is refunded – paid – directly to them.”

      • ivanislav says:

        Edit – in the example, the employee would have to make $40k for the year for the employer to get $28k.

    • phleep says:

      You lost me at “the next 40 years is inflation.” The being that can project that far out is a hypothetical being called God, but certainly nobody else. That goes for BTC being “a non deflationary asset.” That is, unless someone has repealed supply and demand.

      • Ron says:

        Bitcoin is not safe ask Silk Road -china

      • Cashboy says:

        I just cannot get my head round the value of Bitcoin.
        Surely Bitcoin is an inflationary asset if it has gone up from US$30,000 to US$60,000 in 6 weeks?
        Why has Bitcoin gone up so much I ask?
        Ia ma told that it is because of the cost of the energy and computer time to find the next Bitcoin (mining)?
        I spend a lot of money on energy to keep my house warm but it doesn’t make my house increase in value.
        Mining the next Bitcoin to me is like finding the next “Prime Number”. Who would buy a “Prime Number ” and what would it be worth?

  10. Perhaps this validates the contention that the economy all along had spare capacity that was not being used?

    We have excessively constrained growth for decades, due to inflation fears.

    The big picture: We need higher gdp growth permanently. If China continues to double our GDP growth their economy will be twice the size of our economy in a third of a century.

    Now is not a good time to think small.

    • James Charles says:

      ‘We’ have 16 years?

      ‘Global peak oil production may have already happened in October of 2018.

      It is likely the decline rate will be 6%, increasing exponentially by +0.015% a year (see post “Giant oil field decline rates and peak oil”). So, after 16 years remaining oil production will be just 10% of what it was at the peak.’

    • drifterprof says:

      GDP growth as a measure of economic health is like body mass in BMI used to measure a healthy metabolism.

      You want a strong body and healthy metabolism to engage in productive activities. There is lean body mass, which includes muscles, which is functional and beneficial. And there is also fat contributing to body mass.

      There are economically fatty contributions to the GDP. For example, people going into debt by spending money on foreign made products. This spending, as well as the corporate profits from it, increase the GDP. Which is pretty much like fat instead of muscle increasing the BMI.

      • Old School says:

        GDP is crap measurement because it doesn’t account for debt on the balance sheet. Extreme debt is correlated to low growth in GDP.

        Plus import is subtracted from GDP measurement.

        • drifterprof says:

          Yes the import value is subtracted. But that is the wholesale price. I would guess that the retail price is least 50% more than the wholesale value which is subtracted from the GDP.

          In other words, the GDP is increased by the profit of middle men and retailers added to the wholesale import value. This doubles the value subtracted from the GDP.

      • Cashboy says:

        You also get an increase in GDP if I pay a lawyer to act for me against a client that hasn’t paid me and the client employs a lawyer to defend my claim.
        Is that beneficial growth of the economy?
        Doesn’t that increase inflation because I have to put my fees up to cover for clients that don’t pay and pay legal costs chasing clients that don’t pay.

  11. Gabby Cat says:

    Baby Boomers left the market for true retirement after Covid. All the retired pensioners that loved working at the local schools for a little spending money quit. No one wants those jobs because they do not pay well. There is a ton of jobs out there and a lot of people do not want them. It was a warning many years ago that the new generation is entitled and the hard workers quit. Salary has gone up, but not enough to afford housing or cars. What is there left to work toward? Remember the day of monopoly controls? We could use some of those again to make assets affordable for the generation that wants to work for something.

    • Phil says:

      Entitled, or grew up watching a handful accumulate massive wealth while the majority saw declines in standard of living?
      Why should I be a debt slave to prop up the Walton families of the world? I think that’s a legit question.

      • Old School says:

        People don’t get rich unless someone gives them money. Did you shop at Walmart? Do you own Walmart stock in a mutual fund? Their money comes from somewhere.

        • Jake W says:

          what choice does one have when the government intentionally puts their competitors out of business?

    • anon says:

      Gabby Cat,

      “Baby Boomers left the (job) market for true retirement after COVID.”

      +1000 …

      … at least anecdotally in my experience. Mid 60’s here and was able to fully retire years ago. My same age friends kept plugging away at something or other. But since the beginning of 2020 most of them have now fully retired.

      • DawnsEarlyLight says:

        Yes, people are tired of playing the games. Most of the people I know are vaccinated, but regardless, the games are still afoot!

  12. DawnsEarlyLight says:

    People will choose to work(or not) for their own reasons. The BLS will choose what Stats it releases(or not) for it’s own reasons.

    • DawnsEarlyLight says:

      Correction for my own reason, ‘its’, not ‘it’s’. BLS, take note.

  13. Double D says:

    The surveys reflect a massive amount of the workforce not working. Hundreds of Thousands of employees shown added to payrolls are not actually new jobs but part time jobs being turned back into full time jobs? People looking for work which may not actually be as available as has been uniformly reported. Imagine that? The real problem is there is no new job growth despite the efforts to fool people into thinking otherwise.

    The reality is our economy is cratering & in terminal decline. The real numbers don’t lie unlike the U.S. Government

    “On top of all what’s here already, there are still those 8.3 million who are now income-less because of September’s huge UI cliff, and then vaccine mandates which – at the very least – are going make things difficult and messy as 2021 draws toward its close.”

  14. Red says:

    Is it possible to short crypto yet. Its just a tulip with a coin name.

    • Mikey says:

      Bitcoin greyscale trust on nyse. It is usually valued at more then the Bitcoin it owns

    • Wolfbay says:

      Certainly doge coin and shib are just a ponzi but maybe crypto is more like the dot com bubble where most stocks where crazy speculation but there was also something real going on. Digital currency and block chain proof of ownership with frictionless transactions could conceivably be something that happens even if 99+% of the thousands of cryptos eventually disappear.

      • Depth Charge says:

        There is no difference between any of them. They are speculative gambling tokens which can be infinitely repeated. 100% worthless garbage.

        • Brant Lee says:

          Yes, but trading crypto coins is fun. You can make some money at the moment because so many people are into it. Take the profit and run, it’s nothing long-term.

    • The Real Tony says:

      The Chinese are for the most part “all out” of Bitcoin due to government restrictions. If that changes somehow Bitcoin will blow past a million. You only short something when the Chinese are “all in” not all out.

  15. Micheal Engel says:

    1) Cut your losses : Afghanistan. Cut special ops expenses.
    2) Cut overhead, especially in high ed. Raise inflation to reduce the
    value of gov debt.
    3) US10Y minus the CPI is in deep negative rates. (-) 0.05 x $30T is a good thing.
    4) US + Putin vs Xi is better than Putin + Xi vs US. Import Putin oil, flush him with $. Approve a Russian pipeline to Germany, appease Moscow and poison the republican states wells.
    5) Those policies have been successful. So why US 30Y is < US20Y and why US10Y tumbled on Fri, in a good news day.

    • Petunia says:

      Re #5:

      Nobody wants any of these bonds. They are the incorrectly priced debt of a dysfunctional govt.

    • NBay says:

      (4) When faced with two adversaries, ally with the weaker one…..pure Kissinger (and old British Empire) think.

  16. historicus says:

    Here’s the game

    *The Fed keeps rates near zero so the federal government can borrow money at nearly no cost.
    *The federal government takes that money and doles it out to a degree, and through various channels, so as to promote idleness.
    *The Fed sees the employment numbers and declares it must keep rates low so as to promote employment.
    *The federal govt continues to borrow at nearly no cost, and doles out the money…..etc etc round and round we go…

    LOW RATES actually have the OPPOSITE EFFECT, but the convenient excuse to keep rates well below inflation.

    • drifterprof says:

      H: “The federal government takes that money and doles it out to a degree, and through various channels, so as to promote idleness.”

      As I’ve mentioned before, IMO ballooning the assets of the rich and the investment class does a lot more to promote idleness.

      It’s difficult to imagine why the federal government would “promote idleness.” Can you give some rationale why this would be the primary reason they dole out the money?

      One might speculate that, more significant causes of “idleness” are lack of opportunity, toxic workplaces, and dead-end employment that can’t keep up with inflation.

      Maybe the government doles out the money to keep the lower classes from rioting and causing general mayhem.

      • Chuck C says:

        Maybe the government doles out of money to buy votes

        • drifterprof says:

          Therz a lotta reasons why government doles out money.

          For example, Rs dole out money the the filthy rich because they control Congressional votes through lobbyists.

        • Jake W says:

          drifter, it wasn’t the republicans who handed out trillions in unnecessary stimulus in march of 2021, most of which ended up in the hands of the rich.

        • drifterprof says:

          “it wasn’t the republicans who handed out trillions in unnecessary stimulus”

          Trickle up, or trickle down.

          Not much difference.

      • historicus says:

        “Can you give some rationale why this would be the primary reason they dole out the money?”

        Very similar to “let them eat cake”.

        The loose money has created Billions in wealth for those with stocks and real estate. To calm the masses as this goes on, they pump out several hundred dollars a month to the “proletariat”. ie Keep them happy with a small “game” as we cash in on a “big game”.
        There are many examples of this in history. It’s a manipulation of the masses by the elites.

        IF the govt promotes idleness, the employment numbers stay at the level where the Fed can deviously point to those numbers and say “we must keep rates near zero.” Now, who/what is the largest borrower of money on the planet? The federal govt…… who benefits by being able to pass TRILLION dollar unread bills funded at record low interest rates.
        Everybody wins……except those harmed by inflation.

        • drifterprof says:

          “IF the govt promotes idleness, the employment numbers stay at the level where the Fed can deviously point to those numbers and say ‘we must keep rates near zero.’”

          Whoa. That theoretical thinking is getting so far out from Occam’s Razor, you’re getting into the Jewish Space Lasers realm of confabulation.

          Trust fund babies promote idleness.

        • Jake W says:

          not sure how it’s theoretical. fed printing enabled the massive stimulus measures. it’s been proven that excessive unemployment discouraged work.

      • Cashboy says:

        The government doles out money possibly to prevent civil unrest.
        I believe that UBI (Universal Basic Income) is more than likely to take place to stop the chances of civil unrest and to increase GDP that for some reason seems to be so important for economists.
        We already have a kind of UBI in the UK. It is called Universal Credit. It is basically free money from the government to people/families that do not earn enough money from their employment to live on. 60% of all households in the UK receive Universal Credit in the UK.
        In effect, the government is subsidising companies.

  17. james wordsworth says:

    The Fed needs to raise rates NOW.

    Even a 1/4 point hike would send a message, and maybe help stop inflation from really taking root.

    We now have a demand supply imbalance cause by too much demand. If they want to wait for supply to catch up it will be a longer wait. Better to cut off demand now and get back into balance faster.

    Plus a quick rate rise will help stop the bubble in stocks from getting even more ridiculous every day.

    But …. NO … we can never have any pin, ever again.

    • historicus says:

      1/4 pt is laughable……
      but its a start.

      Two things changed in 2009

      *Fed Funds used to be at or near the inflation rate so as to protect the holders of dollars….(what would that mean today?)
      * It was rational to assume that each generation should pay its own debts.

      Both have been thrown out the window. Who changed the Fed? What has the Fed done that they have never done before? Cui Bono?

      Who learned that the Fed was now “different” and that they would shirk their stated duties, not lift a finger to inflation? For if they had stuck to their directives/agreements/mandates, being fully invested and leveraged would not be the sport it is today.

    • Marco says:

      And now billions more post last night’s vote

    • phleep says:

      The masses do not reward upright leadership. Self-sacrifice or shared sacrifice is a meme for a streaming superhero movie, not a real thing now. And sadly, there is some sense in reckoning nowadays it is for suckers (as fed by the bad example of the imperious rich, who forever made a high art of externalizing risk and consequences, now visible to all).

      Wasn’t it onetime Fed chair William McChesney Martin (who left a cushy job and enlisted in the military in a little thing called WW2) who coined the saying about the difficulty of taking away the punchbowl when the party is getting started?

      Humans like to be liked, too much, bureaucratic and voting ones too. Consumer society fed this. It is a neurochemical opiate. They (we) crowd and wag tails agreeably like dogs, heading for perdition.

      • drifterprof says:

        Psychopaths and users don’t like to be liked too much. They like to be liked enough to screw/dominate others.

      • Sams says:

        And since when did the masses vote in the USA?

      • NBay says:

        “Other Directed”
        Sociologist Reisman wrote a book on it. One of the books in Soc 1A.

    • Old School says:

      Yes. Good indicator Fed has printed too much money is that the world’s most fundamental investor W. Buffet has $140 billion plus dollars on balance sheet. That basically means on a long term reasonable hurdle rate there is nothing out there that can be found.

      Every long term asset the market is buying now is being bought with the idea that a buyer can be found at a higher price down the road. Fed has led many into the valley of death.

      • Jake W says:

        it’s also being bought with the idea that every “asset,” no matter how ridiculous, is a good inflation hedge. i don’t disagree that cash is bad if the fed is intent on printing unlimited amounts of it, but most assets being purchased as today’s prices won’t fare well in a hyperinflationary environment either.

    • Jacob Hunt says:

      Mate, mortgage rates were just beginning to rise before the Fed’s if the world just crushed them last week.
      Raising rates will wreck their Frankenstein very quickly!!!

  18. Winston says:

    22.1 million “workers” in government EXCLUDING military and the 4th branch, 15.5 million in “Leisure and Hospitality” and only 12.5 workers in manufacturing…

  19. Winston says:

    “Imaginary” should be added to this article’s title.

    Crypto is Creating Newfound Wealth – and Job Freedom – for Many Americans

    Civicscience dot com survey – 6,741 responses 10/20/2021 – 10/27/2021

    “Have you, or someone you know, quit your/their job at some point over the last year due to financial freedom earned by investing in cryptocurrency?

    4% – Yes, I have
    7% – Yes, someone I know has
    88% – No, not at all

    Surprisingly, however, when crossing by income, we see that the larger portion of those quitting their jobs as a result of their crypto investments are those in the lowest income brackets.”

    Not surprising to me.

  20. Richard Greene says:

    I always wonder if measurements of inflation used for Real GDP are understating actual inflation, so are over stating Real GDP growth. That question would also apply to Personal Consumption Expenditures (PCE).

    The article suggests labor productivity is booming.

    But an article I read on November 4 stated:

    “Labor costs surged in the third quarter…, with productivity sinking at its steepest pace in 40 years… ”

    Which seems to be a different message.

    • historicus says:

      Personal Consumption Expenditures (PCE).

      PCE is chain weighted and allows the substitution OUT of items that rise “too much” in price. How’s that for a low biased metric?
      Hamburger Helper is really good all by itself.

  21. wkevin says:

    In the sector where I work, e.g. large corporation/manufacturing, it is easy to continue to produce product after cutting large fractions of the company. At any time, dozens of percent of these companies are “administrative”- note that this often includes sales and research people.

    So, in the short run, it’s easy to make big companies look more efficient. In the long run, it’s burning the seed corn or furniture, as they say. I think Exxon has cut large numbers of managers/administrators in the past 2 years.

    You often see this effect during the middle of a long economic cycle. The economists scratch their head and say that they don’t understand why productivity has declined for a few years. It’s often because they cut those activities a few years prior to that, and there is a delay before the innovation and efficiencies from those activities are realized.

    Understanding this used to be called business skill.

    • Jake W says:

      agree with your larger point, but a large number of sales people truly are useless.

  22. wkevinw says:

    From what I found, Exxon will cut at least 20% of its workforce in the next couple of years.

    That’s how you get the same output with lower costs/higher profits in the short run.

  23. Anton says:

    Expressed as a percentage, our labor force is now less than half of the USA population. It is down to 48% of the population. So to some extent we really do need the Build Back Better plan. If you consider that the plan is basically a way to support that 52% of the population that no longer works at all.

    And before the conservatives amount you say that supporting those people is somehow wrong, consider the fact that Americans are not really lazier than in years past. What has changed is the structure of the economy. Some people get incredibly lucky and cash in, others make a subsistence income for years, and much of that is not due to effort but into lucking out into the right industry at the right moment. For example I have a client that earned over 1.4M in the last two years, basically a lifetime of income, simply because he worked for a company that did really well during the pandemic. As our economy continues automate, we have to support people unless we want more instability and political strife.

    • eg says:

      There is much wisdom here, Anton, but those in a position to make the necessary transition aren’t listening. It’s “I’ll be gone, you’ll be gone” and “the devil take the hindmost” all the way down …

    • Augustus Frost says:

      Ultimately, no amount of bribery will work as you imply. I don’t know where it is, but there is limit to the ability to support a majority of the population on smoke and mirrors.

      It’s a combination of physics and human nature.

      If you disagree with what I just wrote, you and those who agree with you are free to support these people yourself.

    • wkevinw says:

      In my experience, automation is not the cause of the loss of earnings in the bottom 50%. It is offshoring of jobs (crony capitalism at its best: create employment costs in the home economy, and use the powers of academia and government to tout the “free market” benefits of going off-shore- where those costs do not exist- rich pick up the $- middle class goes toward working poor.):


      significantly contributed to the collapse of manufacturing employment in the 2000s, but finds
      little evidence of a causal link to automation”…”Without the computer industry, there is
      no prima facie evidence that productivity caused manufacturing’s relative and absolute
      employment decline”

      • Nick Kelly says:

        People vastly overestimate the current ability of automation/robotics. Largest use in US is packaging from bulk to retail.
        Elon Musk has a comment after his experience with robot factories: ‘Humans are underrated’

        We’ve all seen the robot welders doing car frames. The position of the frame never changes and it’s a spot weld, not a screw or bolt. For assembly, the bots are not practical.

        • NBay says:

          Worked on machines at P/O that read, barcoded (ink jet printer, same ones that mark milk, etc), and sorted mail.
          They did not look at all like what people think of when you say “robot”.
          But they replaced at least a couple thousand clerk, mail handler, and carrier jobs during the time I was there, likely several times that now. Big mailers like insurance and other corps use similar gear.
          Alternate way to define a “robot”…jobs lost.

        • NBay says:

          Correction…..couple HUNDRED thousand.

  24. Phil says:

    Price index up 5%, pay up 1.6%… that doesn’t add up to me. I’d rather stay home and live simple than help higher ups pad their purse. Couple that with what looks like a massive wave of boomer retirements… presto! Lots of bodies missing from the labor market.
    I find it a really interesting parallel that the black death/bubonic plague affected the labor market enough to completely change society. Obviously mortality here is not the same, but some of the trends are.

  25. Petunia says:

    Lots of people retiring early if they have the means. This includes people in their 50’s and 60’s. Many don’t want to submit to the mandate and are walking away. It turns out it may be advantageous for them to draw down their 401K during these years and grow their SS benefits to age 70. If they still have a working spouse providing healthcare, they are able to do this cheaply. And drawing down the 401K income in later years, cuts back on their medicare costs. This type of retiree is off the labor radar.

    This is only one scenario of people bailing out of the labor force.

    • drifterprof says:

      “Many don’t want to submit to the mandate and are walking away.

      Anyone who makes an lifetime economic decision based on not wanting to get an immunization shot is pretty much a wack job.

      • ivanislav says:

        Totally irrespective of the science and safety, some of us don’t want to usher in a world where the government can coerce you to take injections. Mandates should be fought on those grounds and medical decisions should remain private. Humanity will build its own prison if it doesn’t wake up to threats to personal sovereignty.

        The changes are gradual and consistent: geotracking with phones, internet surveillance, corporate-government merger and censorship, license-plate tracking at all major intersections, and now government intervention in whether one can attend events, shop, travel, etc. If you can’t see the risk of government abusing that power, I will be shocked. History is replete with examples that should give you pause.

        • drifterprof says:

          Would you say the same about the polio vaccine?

        • ivanislav says:

          The two diseases don’t belong in the same conversation from a health-risk perspective. As far as mandates, no I don’t think people should be discriminated against on the basis of whether or not they’ve had the polio vaccine either, though I would certainly recommend they get it. Again, for me it’s a question or rights, coercion, and normalizing and laying the technological groundwork for the government shutting off the lives of dissidents, non-conformists, etc.

        • Wolf Richter says:


          You are not FORCED to drive, but if you drive, you HAVE to drive on the right side in the US. You’re not FORCED to drive trucks for a living, but if you decide to do that, you will HAVE to get a CDL and pass other requirements, such as drug tests. You do not have a right to work for a particular organization. If you want to work there, or continue to work there, you have to meet the requirements, such as CDL, education, skills, experience, etc. No one says you HAVE to eat in a restaurant, but IF you decide to eat there, the business can require certain things, such as “no shoes, no shirt, no service,” or back in the day, nice places required a jacket and tie. You do not have to get vaccinated, but if you want certain jobs, that’s part of the many requirements of getting or maintaining that job. You choose the employer and apply. Then the employer chooses the applicants. An employer can refuse to hire applicants or can fire employees for myriad of reasons, or in many states for no stated reason at all. This is not rocket science.

        • Jacob Hunt says:

          Isn’t polo a protein based vaccine like EVERY vaccine that ever was before 2 years ago?
          We know about protein based vaccines

        • Apple says:

          The only reason these people are alive at all is because they received vaccinations as a child.

        • Jake W says:

          apple, saying that because some immunizations have been great for society that means that all immunizations are great is fallacious.

          and i say this as someone who has had three shots of pfizer.

        • Tony says:


          You are a well spoken and brave man.

        • Old School says:

          Aaron Rogers has a good interview out on his experience.. The risk reward changes based on age and health.

          Once you get to a 5 year old the benefit of vaccinating a healthy child doesn’t out way the benefit to the child.. They are really risking the child for the societal benefit of heard immunity. Very immoral in my opinion.

        • NBay says:

          Sorry, but it’s back to jr high (or maybe high) school Biology for you Jacob, after those two…ahh….er…..”statements”.

      • Petunia says:

        If you don’t control what goes into your body, you don’t have any freedom. Plus, you must be aware some people cannot take the shot(HIV, Cancer, or Circulatory Issues) and are being mandated to do it or lose their jobs. The govt has turned it into a job vs. life vs. freedom issue. They are already seeing the political fallout.

        • Apple says:

          You now have the freedom to look for a new job.

        • wkevinw says:

          There is supreme court precedent for requiring vaccines to use public services, such as public schools.

          These are in qualifying, specific situations, however- e.g. these are “childhood diseases”, you do not have the right to use public schools, so you have to comply to do that, etc.

          The theory of US law is that private sector transactions should be as minimally regulated as possible (theory, anyway).

          Somebody asked about the polio vaccine. I am sure a lot of people don’t know about that history. It was ugly early on for many vaccines (see “Cutter Labs incident”).

          I am guessing there have avoidable medical catastrophes recorded because of the covid vaccine: e.g. all the cardiovascular symptoms.

          Note: a recent UCDavis study showed that viral loading (i.e. being contagious) is similar for a vaccinated person with a breakthrough infection as for an infected non-vaccinated person. The vaccines basically only protect the individual vaccinated, keep the hospitals from being over-run, etc.

        • Wolf Richter says:


          One of my best friend’s ex-wife was a vocal anti-vaxxer. She believed all the anti-vaxxer BS she read on the internet. She died of Covid a few weeks ago, after two weeks in the ICU. Terrible way to go. In her early 40s. Otherwise healthy small-town girl. She died for her believes, fine with me.

          But I care about their daughter, and she just lost her mom. I hold everyone personally responsible for the many many girls and boys that have lost their parents to Covid because they believed the BS they read on the internet and refused to get vaccinated. And I have zero tolerance now for people spreading anti-vaxxer BS via my site because I have seen personally what this does.

          People can believe whatever they want, but they cannot spread their beliefs here.

        • drifterprof says:

          “Note: a recent UCDavis study showed that viral loading (i.e. being contagious) is similar for a vaccinated person with a breakthrough infection as for an infected non-vaccinated person. The vaccines basically only protect the individual vaccinated, keep the hospitals from being over-run, etc.”

          Given the premise in the first sentence, the conclusion in the second sentence is an obviously false.

          For example, “the Massachusetts Department of Public Health (DPH) had received reports of more than 5,000 breakthrough infections — or about a tenth of a percent of the more than 4.3 million fully vaccinated state residents.”

          So 99 percent of vaccinated individuals did not have a viral load similar to non-vaccinated people who got covid. If those 99 percent had not been vaccinated, covid would have spread to millions in Massachusetts. But yes, about a tenth of a percent may have had viral loads similar to non-vaccinated individuals who got covid.

          Regarding the UC Davis study, this statement was made by one of the researchers:
          “Our study does not provide information on infectiousness,” Michelmore said. “Transmission will be influenced by several factors, not just vaccination status and viral load.”

        • Max Power says:

          If someone has a legitimate medical reason not to take the vaccine then they are exempted from the mandate.

          (Being a fool BTW is not a legitimate medical reason.)

          Anyway, like Wolf, I also know folks who refused to take the vaccine and passed away from COVID. This disease is very insidious. You never know how it’s going to hit you. This one couple I know of refused the vaccine for “religious reasons”. They both got COVID back in June. The husband had no symptoms but the wife died from it after a short stay in the hospital. Don’t take the chance. Get the shot.

        • Richard Greene says:

          Smart comment again Petunia.
          The third time I’ve told you that.
          Keep up the good work.

        • DawnsEarlyLight says:

          Well, something’s rotten in DC.

        • Swamp Creature says:

          We took the vaccine back in April and May, because we were in a high risk job, going into toxic properties in DC’s worst neighborhoods. And we were both in the high risk group. It was a practical decision.

          I recommend people who are in a similar situation do the same, and stop listing trivial reasons for not taking the vaccine. I’ve already lost several friends and my Dentist from Covid-19

        • NBay says:


          Instead of anecdotes or opinions, here is the best comprehensive short article I have found on Virus/Pandemic History going back to the 1918 Flu.

          Yep, it’s a no-no “link”, but I do not know how to make it google-able.

          It is not all that hard to read, good charts and pictures, and don’t let the scroll bar fool you, halfway down it’s just references.

          If you spend a little time with it you will get a lot more insight than you ever will from any media “science writer” or talking head, or TV doc…… including Wolf, who should also read it.

          Wolf’s and then maybe your choice. You can either babble or actually know quite a bit about what you are talking about, especially when you say “long Covid”…no idea who came up with that.

          Hope it flies.

        • NBay says:

          From more clinically oriented references in the article:
          (My own non “ticketed/certified” translation)

          What is really doing most of the killing is the virus moving into the nervous system, not the usual viral caused pneumonia stuff. (Perhaps our lifestyles and diets are also factors in this phenomena).

          EXACTLY like polio, which is a gut specialist (give you the nasty shits and then hope for feces to mouth transfer) rather than a lung to lung specialist.
          But move it into parts of the nervous system and it’s leg braces, wheel chair, or Iron Lung time, just like being put on a “ventilator” (actually kinda like a cheap iron lung).

          And the nervous system problems can affect ALL other organs.

          Wearing a GOOD mask is pretty damn cheap and easy protection….you have to wear clothes, right?

      • Trailer Trash says:

        “not wanting to get an immunization shot is pretty much a wack job.”

        Yes, because informed consent is so last year. Ultimately we are all slaves of the state. Some of us accept that. Some of us don’t.

        • drifterprof says:

          There is full informed consent in covid vaccines. People who choose to leave their job because they don’t want the vaccine are fully informed, and freely decide not to consent. And some lose a good employment position doing so. Wack jobs.

      • Shiloh1 says:

        Perhaps when donating an ‘extra’ kidney while still alive is mandatory to renew at the DMV is the hill to die on. Just as long as everyone knows the difference between a kidney and liver from their grammar school science class, circa 1965.

      • Richard Greene says:

        An American hero to me.
        Principles of personal freedom
        over dollars.

        Leaving one job is not a lifetime
        economic decision.

        • phoenix says:

          They’re taking this dumb stance precisely because they don’t have personal freedom. This whole anti-vax movement that popped up is a desperate attempt for the lumpenproletariat to feel like they have some control over their lives. They’ve been economically cucked by the elites for decades. They are already being tracked via their internet browsing patterns, their cell phones, their purchases, etc. I’m sure a lot of these idiots have homes full of smart devices. American politics is full of wedge issues like this (crt, abortion, etc). Meanwhile, both parties continue to bleed the country dry.

    • RedRaider says:

      My parents had 3 sons. 2 retired at 55. The last tried to hold out to 67 for the increased SS check and healthcare. Even he gave up at 65. Truth is employers tend to treat 55+ very badly. There’s very little future in maintaining a relationship with these folks.

      Can you explain how cutting down on future 401k income cuts back on medicare costs?

      • El Katz says:

        You take the distributions from your 401K rather than taking your SSI. The SSI payout grows from full retirement age on, even without additional income.

        The 401K distributions, less the SSI, puts you in a lower tax bracket. Some have a lot of money in their 401K’s and bleeding the balance down over a few years can lower your RMD’s when they become mandatory (presently 72).

        Medicare is not free. You pay a monthly “premium” – usually deducted from your SSI check. The higher your income (bracketed), the higher your monthly “premium”. So, SSI + RMD can put you into that higher Medicare payment…..

        If that makes any sense at all….

      • Petunia says:


        Assuming you retire at 55, you can live off your savings until 59.5, then live off your 401K until 70. The more you draw down savings and 401K in the early years, the less of it you will need to draw down later when you go on SS. By then more of your income should be coming from SS and less from 401K.

        Keeping your income under the medicare surcharge threshold, from 65 onward, will keep it cheaper. You don’t want to have to pay more for medicare because you saved more for retirement. You may also lower your overall tax bill, because only up to 85% of SS is taxed, and all of the 401K money is taxed.

      • RedRaider says:


        Let me think on that.


        • RedRaider says:

          I hit 72 this month. Think my CPA is counting 50% SS. Also, I’m using IRA instead of 401k. Don’t know if that makes a difference. Just asked my CPA how much required minimum withdrawal was.

          My impression was I would be paying some tax but nothing to get upset about.

          I’m one of those minimalists you hear about. I didn’t want to withdraw at all from my IRA and I’m making it on 60% SS check. Hope to have that down to 55% next year.

      • Max Power says:

        Yes, there is a threshold after which Medicare Part B premiums begin to rise – but that threshold is pretty high: $88,000 per individual ($176K per couple) per year. Even then, the raised premiums don’t fully phase out until you pass an income of half a million dollars. Most retirees don’t have annual incomes anywhere near these amounts.

    • Old School says:

      I worked for corporations for 25 years til 47. Even that is long time and would get you a retirement in some fields. There comes a rational decision that the American dream life just isn’t worth pulling the wagon any more. For some it comes at 40, 50, 60 or even 70.

    • Richard Greene says:

      Petunia is on the mark again.
      My wife retired at age 51, in 2000, and was having such a happy retired life that I retired four years later at age 51 too. Best decision I ever made in my life. If work was fun, they wouldn’t have to pay you to do it.
      And we don’t have to submit to any vaccine mandates !

  26. c1ue says:

    It isn’t just crypto.
    I am hearing/seeing more and more “day traders”. It doesn’t matter if it is stocks, crypto, NFTs, whatever.
    And like all such past bubbles, the day traders will almost all disappear when this bubble pops.

    • RedRaider says:

      … day traders will almost all disappear when this bubble pops.

      Do you mean because they’re bankrupt or because they won’t have to day trade anymore?

  27. Max Power says:

    The CAPE ratio hit the big four-oh yesterday. Given this level of valuations, it’s difficult to see how real returns over the long run will allow so many early retirees to remain retired forever.

    • Jake W says:

      also, don’t forget that the last year’s worth of “earnings” are artificially propped up from stimulus that is not likely to be repeated. trillions were printed, handed out, and most of it ended up in the hands of big corporations.

      • jon says:

        Honestly, this insanity can go on for decades to come.
        People who have used common sense to value the market have been bitten badly in last 10 years or so.
        Most of my smart friends with higher degree of analytical skills have exited market years back as valuations don’t make sense but they have lost big time …

        I can tell you for sure Govt/Fed would keep stimulating economy ad infinitum because it suites their masters.

        Fed would do a dog and pony show of tapering and then hiking but it wont last long.
        The inflation on ground is much more than 20% and FEd is still printing 120B/month and rates at zero percent. Give me a break.
        If people can’t see this obvious thing then not sure what can wake them up.

        • Jake W says:

          i agree it’s insanity, but i don’t agree that it can go on for decades to come. the pure nonsense only really started 11 years ago. we’ve built up over a century of wealth and goodwill as a superpower. we were always going to get some runway, but it’s not unlimited. the fact that each bout of borrowing and printing is an order of magnitude bigger than the last should show that it’s running out.

        • historicus says:

          all true

        • Old School says:

          First sentence in my finance book explains that there are financial assets that represent real assets. If you add stock equity plus debt the ratio is closing in on 7. In other words the production capacity of US has too many claims upon it. At sometime people will sell financial assets because they can see first ones out the door are the only ones going to get paid.

        • Max Power says:

          It could go on for a while, yes… but decades from this level of PE ratios? Unlikely.

          The specific valuation metrics which are increasing have to do with profitability. The disconnect between profitability and return on investment is simply a function of speculation but some day physics has to take over, it’s a mathematical destiny. The question is when? If the CAPE was at 20 then I can see ‘decades’ as a possibility but at 40 it’s not likely we’re talking that kind of timeline, especially when companies are going to face mount rising wage pressures.

        • Jake W says:

          max, not to mention that the economy isn’t really growing. if high valuations are justified because of expected growth, then there should be high growth. i don’t see any evidence there will be.

  28. RedRaider says:

    I live in Central time zone. Wolf is in Pacific time zone. A difference of two hours. And yet posts are timestamped only 1 hour behind me.

    Wolf, have you secretly relocated? 🙂

    • RedRaider says:


      Now it’s the same time…

    • Wolf Richter says:


      “…have you secretly relocated?”

      Yes. Not secretly, and only for a few days. And it’s already over.

      As I said here somewhere, I was in your time zone. I traveled to Tulsa to see off one of the most important men in my life who’d passed away. Friday I flew back to San Francisco. This involved all sorts of chaos and delays at DFW, where I posted some comments. Now I’m back on Pacific Time.

      • RedRaider says:

        So sorry to hear that. You have my sincerest condolences. My mom died 3 years ago and I still feel out of kilter. Almost like the universe has a different Planck constant. I’ld much rather have the old universe. Expect you feel much the same way.

  29. Micheal Engel says:

    A hundred years chart, halftime : SPX monthly log :
    Oct 1974 low to July 1982 close // a parallel from Jan 1973 to Nov 2021.

    • Petunia says:

      None of those numbers matter because we still had free markets back then and we don’t anymore.

  30. GSH says:

    Note the “Lying flat” phenomenon in China. Many young Chinese only work just enough to stay alive. They reject the rat race of ever diminishing returns. Seems to be a surprisingly global trend.

    • drifterprof says:

      I’d like to hang out with those lying flat people.

    • Bobber says:

      Lying flat is what happens when the profit’s share of GDP is way too much, relative to wage share of GDP. People like to see some benefit for their hard work.

    • Petunia says:

      Why work if you can’t find a mate, will never have children, or buy a home.

      At least in the progressive US, we incentivize having children without marriage, without fathers in the home, and you can lie flat on the govt dime or on your baby mama.

      • Jake W says:

        this. people don’t go above and beyond at work to merely survive. when housing, retirement and other things are increasingly out of reach, all while the oligarchy get rich on everyone else’s labor, it’s not hard to see why people are going galt.

      • Rowen says:

        Look up the 18-34 year old NEET (Not in Employment, Education, or Training) rates for Europe. The periphery has been decimated since 2008, but now the core is starting to get crushed.

        I don’t know how Europe functions in a generation. Lost Decades have become Lost Generations.

      • Anthony A. says:

        There’s so much “lying flat” going on in the U.S. there are mattress stores on every street corner.

    • Rowen says:

      An American version is called “Van Life”.

      In Southern Italy, it’s just normal life…

  31. Inno says:

    Wonky economist might suggest that WFH created higher labor (and perhaps capital) efficiency than the office.

    Consider the shower/prep/commute/office_chat/commute overhead involved for most office jobs, compared to WFH and the data might even support the theory.

  32. Theodore F Byrley says:

    i was amazed by all of the comments. I can only conclude:
    1. Becoming the monetary authority of the world in the end was a bad mistake.
    2. Inflation in homes, cars, education and wages is happening.
    3. Debt usage is totally out of control for homes, cars, education, federal government, and business is nuts.
    4. There is a major redistribution from middle and lower income people to upper income folks.
    5. Upper income groups are paying more taxes and many lower income folks are not paying taxes. Yes I know about sales taxes be regressive.
    6. Stock Markets are over stimulated by federal and monetary authority actions.
    7. Tech firms are destroying the family (making women depressed).
    8. Education has gone down the *#!!. Students have stopped learning. Online is just the training ground for corruption and cheating. I have experienced this sadly with my own experiences.
    9. Tech firms have way too much power in society and markets.
    10. The meta-verse is just around the corner waiting to finish us off.
    11. Online education and meta-verse education is not human.
    12. The end will likely come in one of two ways. The first way is that the government will stop and there will be a major major downturn with deflation, unemployment and financial markets down at least 50%. The other way is the government will not stop and we will end up with hyperinflation, the dollar falls and we lose our privileged status as the monetary authority, and the worst thing is that the distribution of income and wealth will end up with the .01% of the population owning everything. At that point children born into this world will have no chance of the so called American dream.

    13. I hope this that government, tech and education establishments simply stop. The debt needs to be paid down. We all need higher taxes sadly enough. That means lower income people need to pay taxes. Progressive taxes is not bad. It is the way we can ensure that the next generation has a fighting chance. Capitalism is good. Education needs to become more practical. Unions are evil but we need them. Regulations and laws need to be reviewed and deleted if not working. The answers will be somewhere in the middle of all of this. Everything needs to be on the table. We need always think about the next generation. Extremism in the defense of liberty is actually a vice. Last Barry Goldwater was a great man anyway. Last, sorry I am just venting and nobody will see this anyway.

    • Anthony A. says:

      We don’t need higher taxes. What we need is the government to stop printing money and pissing it away.

      • historicus says:

        Thatcher said..
        “The problem with Socialism is that you eventually run out of other People’s money,”
        Maggie never envisioned, never imagined that central bankers would do what they are doing now…QE, etc.
        She never imagined!!!…….that’s how off the rails these central bankers are….they are doing what was once “unimaginable”, and doing it in great magnitudes and unquestioned as to their authority to do so.

        • Jake W says:

          historicus, her adage still holds. by printing money, you’re effectively transferring money from people who hold dollars. eventually, you run out of those people too.

        • NBay says:

          She stole that line from Alexander Dumas, a famous businessman (among other things) and easily an .01%er in his time.

          “What is business? Simple. It’s other people’s money.” -Dumas

      • OutsideTheBox says:

        Let’s start with the defense budget of 1.3 trillion EVERY SINGLE YEAR. So ten years from now we have spent 13 TRILLION DOLLARS ! On an organization that was TOTALLY HELPLESS against Covid.

        See…..national security is only parly ensured by the Pentagon and other such agencies.

        What we need to do is financially kneecap the Military Industrial Complex.

  33. Ather says:

    4.7M + 1.2M/Yr growth * 2 yrs in 2020/21 = 7.1M total jobs have vanished

    • Wolf Richter says:

      The jobs are there — 10.5 million unfilled jobs. The people that could fill them are not willing to fill them. Huge difference.

      • KurtZ says:

        What’s the point of working if there are no benefits, and protections.

        Wages are up, so what! Inflation is going up faster, then those rises!

        No pension? You are just a wage slave…. until you die.

        No unions. No one to protect you against your shitty bosses.

        Stop harping on jobs. Labor shortage is as much a demographics problem as anything.

        Numbers can and are fudged. I have seen reports from people inside HRs, before the Pandemic, that said most of these openings were FAKE, and they had no intention of filling them.

        Job openings, in an era of creeping-almost-complete-automation-with-AI, is a psyop.

        Makes us workers /unemployed feel like we are lazy. It’s BS.

      • cb says:

        Wolf said: “The jobs are there — 10.5 million unfilled jobs. The people that could fill them are not willing to fill them. Huge difference.”

        suggested modification: The people that could fill them are not willing to fill them ……… at the offered price.

        When you make dollars worth-less people want more of them to do anything,

      • Rowen says:

        Perhaps bring in some of the 50% of the youth that are unemployed in the Southern European countries? It’ll be like the 1910s all over again; we can process them through Ellis Island.

        • cb says:

          Why would they come here? My understand is that they live relatively well Europe.

  34. 2BFrank says:

    A large part of rent increases, and various others, is “making up for it” if you as a landlord had been forced by law to have non paying tenants in your property for a year or more what are you going to do as soon as you are allowed, that’s right “make up for it” with big increases, same for any business forced to close if they can they will institute big price rises to “make up” for the losses they suffered.

    • Petunia says:


      Don’t you see universal rent control is already here. There will be no making up for the lost years with big rent increases, because nobody has the money. The renters are a bigger voting block than the owners, it just math now.

      Look at the last election, revenge of the thrown off unemployment non voting block.

      • Jake W says:

        yes, i really don’t understand how landlords in places like tampa and miami can raise their rents by 25% and not have any problems. i get that a lot of people have moved down to those cities since covid began, but do they count on a steady stream of new people to pay their rents? i don’t get it.

        • Petunia says:

          In order to pay for the 25% increase your income must have risen by 75%, three times the increase minimum. Nobody is getting those kind of increases, anywhere. Landlords are delusional.

  35. Ed says:

    Consumption counts toward the GOP. Well, the government has been mounting deficit spending (via big unfunded tax cut and then unfunded handouts) while the Fed has been encouraging borrowing and pushing the markets up.

    It’s no wonder spending is up!

    Meanwhile, the pandemic isn’t over and some people are still staying home to eat and for entertainment. I suppose those service jobs may not be as significant to the GOP number as the wild deficit spending.

  36. Nick Kelly says:

    I didn’t comment on the anti-vax stuff! Way to go N: baby steps. baby steps.

    Moving on to inflation, interesting data re: Suez Canal
    2022 rates up 6 percent. So what, since everything is up?
    There is no justification in terms of extra costs of inputs. There aren’t any.
    Plus its doing record biz:

    ‘The canal authority also reported record revenues in the last financial year, despite the six-day blockage after the 220,000-ton Ever Given ran aground in March. Revenues rose to $5.84bn in the 12 months to 30 June as strong demand for goods drove a recovery in trade.’ Guardian

    About 1800 ships used it in October. They are raising rates because they can.

  37. me says:

    All this talk about why people left the job market and who left is up to many interpretations without the hard data to back it up.

    Here is how we’ll be able to figure a lot of it out and remember you read it here first from ‘me”.

    Every year the US Social Administration puts out data about income and expenses. This can be found in the Trust Fund data.

    These numbers are real numbers and can not be faked. Probably one of the few government data series that people can trust to be accurate.

    As the data from 2021 and 2022 are published we’ll be able to see how much income from social security taxes increased or decreased.

    We’ll also be able to see how much was spent on the various programs as well. There will be some strange movements as there were probably some excess deaths from old people as a result of the virus which will not be relevant in the 2022 data.

    Another clue will be how much taxation of benefits the SS Fund gets as income. These inflows started in 1984 and were relatively minor.

    A big increase in benefits payments will show that a large number of older people retired. The change will have to offset the fall in payments to the older people that died from the virus.

    Those that took SS retirement pay, but didn’t actually retire from the workforce will see their benefits taxed. A huge increase in txed benefit income will show this.

  38. wkevinw says:

    US contribution: freedom of thought and action.

    I might be “fully vaxxed” but defend the right for another thought or action. This is not common in other places like Europe, Asia, …

    Seems simple. Don’t bet on it.

    • Wolf Richter says:

      You completely mis-define the issue. You can choose to get vaccinated or not. Up to you. The employer can choose whether or not to hire or keep the employees. Up to the employer. It’s that simple. You do NOT have the right to work for a specific organization. It’s a job, and the employer decides their end of it, and you decide your end of it. That’s how it has always been in the US. So if you do not want to get vaccinated, fine. But you have to live with the consequences of your decisions. Just like when you decided not to get a CDL, well, there are certain jobs you cannot do and certain employers that will not hire you. Simple as that.

      • Old School says:

        Legal world around employment is complicated now. Supreme court will have to make the call.

        I suspect reasonable accommodation will have to be made for religious and medical reasons similar to accommodating religious practices if possible or accommodating a pregnant woman if possible.

      • Swamp Creature says:

        Yep, vaccine mandates should be on an employer by employer basis, and from there a job by job basis. Those working with the public should be vaccinated. But for those who don;t wish to, there are alternatives, like assigning them a desk job away from people, or a work from home job. Only if none of these alternatives are available should an employee be fired for not taking the vax.

    • Crush the Peasants! says:

      Employment is at will. An employer can terminate an employee for any reason, e.g., having AIDS, being disabled, making disagreeable social media posts, having the wrong skin tone, being too old, etc. It does not mean that those terminated have no legal recourse or that the termination will be viewed as legal.

      • Anthony A. says:

        I don’t know if every state has “at will” employment, but Texas does for sure.

  39. George Wood says:

    Blame the knuckle dragging executive branch.

    All the pay goes to the top few and so should the blame for all that is wrong in the labor markets.

    Amazon runs circles around Fedex in every possible way.
    Fedex cannot even get their packages to their respective vans to be delivered.

    Package weights/size/dimensions are much larger/heavier/irregular compared to Amazon.

    Fedex hasn’t adapted/innovated/responded to any workplace/business changes is 20+ years. The labor problem starts and ends at the executive level.

    Fedex, hires mostly part time package handler/loaders and can’t figure out why everyone quits.

    Notice how the bewildered executive branch never mentions that the work shortage they complain about is designed by management to be part time, inconvenient hours and ridiculous. Why innovate when all packages regardless of weight/size/irregular dimension can be physically knuckle dragged to each van.

    • George Wood says:

      Wall Street and to a lesser extent the media is ultimately to blame.

      Amazon fired Fedex.

      To me the the reasons are now painfully obvious.
      And yet, executive pay continues to expand at an exponential rate.

      The problems we are experiencing are not due to a labor shortage.

      • 728huey says:

        Some of the current inflationary issues with supply chains, labor shortages, etc., may have been exacerbated by the pandemic, but the roots of all these issues came from decisions made long before some rogue virus came out of Wuhan, China.

  40. BuySome says:

    People, every last one, tend to overestimate the real world value of what they do. Because they overestimate this, they tend to believe they are worth more than they are. As a result, they generally are willing to pay more for goods and services than they should. And they believe they are better for it. In response, sellers and rentiers consistently seek more than they deserve for what they provide. And as a general rule, those who recieve more tend to overvalue themselves more. Then one day they all have to fight over the last stale loaf of bread and the chickens of reality come home to roost. The empire goes back to mud. There will be no such thing as real falling rents or prices until all the overvalued incomes come crashing down to reality. And the truth is, without expensive maintenance inputs, crap shacks ain’t worth squat in the long run…it’s what you do with the land itself that counts. And even that plays out when you die…someone else has to pick up the shovel or it all goes to dust.

  41. SpencerG says:

    It is certainly a weird hiring environment right now. Employers can complain about people not be willing to take jobs but they really ought to look at their own HR processes more.

    Personally I have been out of work for exactly a year now (Halloween) and according to the online platforms that I have been applying through I have filled out 208 job applications in that timeframe. I have made the initial cut in well over half of those applications but have only scored three job interviews… and no offers. My background is that I am in my mid-50s… graduated from the Naval Academy… got my MBA at Wolf’s fine school… “Hook em!”)… taught Marketing and Management at two universities… and served 28 years in the Navy and Navy Reserve. I am not applying for IT jobs… just for Management and Marketing jobs so I SHOULD have a strong shot. But no…

    It is not just me, I know. As Wolf said above… ageism is a thing. A high school buddy of mine (same age) who has had decades of management experience told me in July that he delays telling interviewers his age as long as possible. He gets lots of interviews but he said you can hear the tone change as soon as the interviewers get a hint of his age.

    And it is not just Ageism that is weeding people out. My deputy for the last seven years of my Reserve career was about six years behind me at Annapolis… so she’s still in her 40s. Eight years ago she moved to some Hippy-Dippy part of Colorado to be closer to her family… and hasn’t found steady employment yet. She was finally able to get some feedback from someone and they told her that the view on the hiring committee was that her background was “too war-like” for a peaceful environmental organization like theirs. The weird part was that for a decade both the Federal job she left and her Reserve job was helping African nations preserve their fishing stocks from being overfished by poachers.

    Like I said above… these companies can complain about a lazy workforce… but they really need to look in the mirror.

    • Bobber says:

      One of the biggest but unspoken employment factors out there right now is ethnicity. Every large company out there is trying to increase diversity levels, especially black and hispanic. I worked at one of these large companies not too long ago, and I couldn’t hire a person without interviewing 20 or so diversity candidates. The company couldn’t find enough local diversity candidates to interview, so they started posting jobs in cities across the country to work remotely. As part of that process, I had to string out a lot of qualified candidates who didn’t fit the diversity profile. Most of them just walked away from the process, wondering why the company couldn’t make a decision.

      The companies never talk about this out loud, of course, but it does explain a lot of interesting behaviors at large companies. The hiring managers you meet with often have unstated restrictions and parameters to deal with.

      • Bobber says:

        I’m not saying it’s right or wrong, I’m just saying it’s happening behind the scenes.

        • cb says:

          Man up and say it’s wrong. It is stealing time from people who are hopeful yet have little or no chance of finding success. That uses people and should be regarded as evil. If certain groups are to be excluded, don’t string them along.

          This has been going on for years. I live in the Los Angeles area and decades ago would spot quarter page ads in the Los Angeles Times where public institutions were looking for job applicants. These were for a variety of jobs, from janitors to Director of departments. Couldn’t understand why they would spend the money for expensive ads when these jobs would be locally coveted, I applied for a few; what a waste. It was part of their diversity outreach program.

        • cb says:

          A great many of these ads were from Oregon and Washington. Their demographics required them to reach far in order to fulfill diversity goals.

        • cb says:

          at the expense of the local population.

      • SpencerG says:

        Well I will say this… in my friend’s case she is Asian-American. Her mother is Japanese. If you are turning away an Asian-American woman in her mid-40s because you think that she won’t be a good fit with your “workplace culture” then either your HR processes need a review… or your culture does.

  42. COWG says:

    All right….

    Who the the gate open?

  43. Brent says:

    Ageism…Well,life appears not fair if one believes all this MSM BS propaganda like “life experience” etc 😀


    2 articles will help you to see things as they really are.

    “Measuring Slavery in 2020 Dollars”
    by Samuel H. Williamson
    Miami University

    With charts and numbers.The price of male slave peaked at the age of 29 – $900 – then declined 80% at the age of 55.Female slaves cost 15% less.

    “Median age at Google is 29, says age discrimination lawsuit”
    “Computerworld” magazine

    Bottom line:
    The price of “human resources” is very age-sensitive.

    • Seneca’s Cliff says:

      One of Intel’s big problems is they spent a lot of the last 10 years trying to push-out, early retire and layoff all the middle aged engineers and scientists because they are the most expensive. I used to go to one of the big Intel campuses weekly for subcontract work and nearly every time they were having a retirement party for some guy in his fifties. The problem is that making cutting edge computer chips as we approach the limits of Moore’s law is a game of perfection. It requires diligence, patience,experience, and extreme attention to detail. But these are not the traits most common to younger people. They may have cooked their goose getting rid of the picky old guys.

      • Brent says:

        From the first article:

        “Price of runaway slave was 60% less”.Most likely author meant recaptured slave,not a slave still on the loose 😀

        Modern equivalent is probably workers who quit and drew unemployment benefits.

        It was always like that.

        In 1920’s-1930’s at Ford Motor Company the unwritten policy was not to hire workers with grey hair.Some unemployed workers dyed their hair and managed to slip thru and earn that coveted $5 a day.

        The movie “On the Waterfront” with Marlon Brando is a masterpiece.200 longshoremen stand on shape-up corner,gang boss barks “You,you and you go to Pier #5,the rest – GET LOST !!!”

        Plus ça change, plus c’est la même chose.

  44. Gen Z says:

    There are many offgrid places in the USA where one can live a minimalist lifestyle. Money printer go brrr for the urban elite and wealthy and expect us to pay the bills.

  45. Kaleberg says:

    Overstimulated? That’s an interesting value judgment. When the government borrows several trillion dollars for a tax cut for billionaires, only a few flake-ass liberals bat an eyelash, but borrowing the same and giving it to people who then spend it is overstimulation?

    Isn’t the implication that the economy has been massively understimulated for the last 40 years? All the trillions borrowed for tax cuts didn’t do anything to boost demand, raise living standards or increase investment. They just led to massive asset price inflation. Thanks to COVID, we’re seeing what a stimulated economy could do, and since it has been over 40 years since the last real stimulus, our economy is taking it hard.

    • Wolf Richter says:

      Very little of the nearly $10 trillion that was thrown into the markets and the economy — $4.5 trillion printed by the Fed and about $5.2 trillion in deficit spending by the US government in just 20 months — was sent to the little people. All of the money that the Fed printed went to asset holders, and a substantial part of the money that the government borrowed and spent when to companies and the already well off (including, as we now know, much of the $800+ billion PPP loans and the corporate bailout funding).

      I have discussed this a million times.

  46. Lynn says:

    A bit off topic, but does anyone know of an article that breaks down where **ALL** the money goes in the new infrastructure bill that was just passed? I’ve gone over many articles and haven’t seen any that go above 3/4s total. And even at that I think I may have added a couple things twice.

    I did look at the full text of the bill, but it’s massive.. FT says it’s like 550B in new spending. Is the rest of it normal yearly administration costs?

    I know no links are allowed, but if a line or 2 of an article is pasted here I could google for it.

    • ivanislav says:

      Regarding your second question, from what I’ve read only 550B is new spending and the remainder was from trust funds (eg highways) that are automatically allocated funding.

  47. JM says:

    I see businesses closed everywhere and don’t believe the “record” GDP stats provided by this administration. If the economy was so great we wouldn’t be at 0% rates, $120 billion a month FED T-Bill/MBS purchases with a .GOV $4 soon to be $5.2 trillion 2021 spending deficit. USA is on financial life-support and this latest bout with double-digit inflation will pull the plug. Expect market to crash 50%+ in near-term.

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